Welcome to FiduciaryNews.com Trending Topics. Each Monday, we’ll give you a quick synopsis of the major news events and trends impacting ERISA plan sponsors, 401k fiduciaries and those in the business of supporting these fine folks. If you smile when you read these entertaining snippets, well, that’s the idea. If you think we’re missing something important, then please let us know. But, note this well, we avoid press releases masquerading as news stories (even though they might be reported by journalists) as well as mass media pabulum that merely mouths investment myths and mistakes.

Fiduciary – The Lost Cause:
It appears the DOL is willing to bank on a risky election before taking another step into the pool. Why must politics always trump logic?
“U.S. Labor Dept. in data tussle over fiduciary rule,” (Reuters, June 22, 2012) Interesting take on the ongoing battle of wits between the DOL and the large brokerage industry. Apparently, after convincing the Congress the DOL needs “more data” to justify its proposed new fiduciary rule, the industry then refused to give the data “because it was too hard to compile.” But it was evidently not hard enough to compile for a controversial survey that supported the brokers’ position. When data mining hinted flaws in that survey, and the DOL asked for the data again, this time the industry expressed concern about “client confidentiality.” Looks like some lawyers are getting paid big bucks.
“Gentlemen’s Agreement: RIAs and Reps Agree on More Than Some Would Have Us Believe,” (AdvisorOne, June 27, 2012) Bob Clark tackles a comment on the Fiduciary Survey results recently released.
“Now it’s the Democrats’ turn to razz the DOL’s fiduciary proposal,” (InvestmentNews, June 27, 2012) Well, they’ve been doing this for awhile.

Fees – The Disappearing Dime Trick:
You’d think the new Fee Disclosure Rule will reveal the magician’s trick of hidden fees, but, presto! That fee is still hidden while being disclosed at the same time.
“New Disclosure Rule Lets You See What Your 401k Costs…Sort of,” (Wall Street Journal, June 24, 2012) Standard article warning the implementation of the upcoming Fee Disclosure Rule may not deliver the data as cleanly and as clearly as desired.
“With 401k disclosure, some fees still hidden,” (MarketWatch, June 25, 2012) Just in case you get a pay-wall looking at the above article (we didn’t), this is the same article from the Wall Street Journal’s free site.
“Is your 401k ripping you off?” (Fortune, June 25, 2012) This is the problem with print media and, especially, large media – because of the lead times involved, stories are written based on a “hot” report from six weeks ago. Problem is, the “hot” report was discredited five weeks ago. Oops! It gets worse with this article. Playing off the theme of “expensive” mutual funds, the author features an index fund provider charging 31 basis points. The article shows compares this favorably to typical (albeit actively managed) 401k mutual fund expense ratios. Unfortunately, the article fails to make the less favorable comparison to other index funds that charge only a third of what the featured index fund provider charges. Double oops!
“Fortune’s Assessment of Industry Stance on 401k Fees Is Misguided,” (ICI, June 25, 2012) Normally this would go into the “Popular Web Resources” section down below, but this is a direct response to the article above. Oddly, even the ICI doesn’t address the second point in the above paragraph.
“How high fees for mutual funds whack retirees,” (Reuters, June 26, 2012) Is this “bad reporting” week? Here’s another story making the same stale argument that even the DOL no longer buys into. Actually, if you get to the end, you’ll see this article is just a covert marketing piece for Vanguard’s index funds. ‘nuf said.
“If a 401k fee is disclosed in a forest (of paper)…,” (BenefitsPro, June 27, 2012) Some will see a forest, others will see a shrubbery. Guess which option 401k plan sponsors prefer?
“Beyond retirement plan disclosure,” (BenefitsPro, June 28, 2012) A good overview of the ramifications of 408(b)(2).

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